John Addison publishes the Clean Fleet Report (www.cleanfleetreport.com) and is the author of the 2008 book Save Gas, Save the Planet. Part One is available here.

Santa Monica goes beyond clean electricity to be a city that models clean transportation. Use of electric vehicles increases every year. The city has over 30 electric vehicles including battery-electric Toyota RAVs and light EV GEMs.

The city is now planning on two Phoenix sport utility trucks: one for the water department and one for the library. The Phoenix trucks have an impressive 130 mile range. Santa Monica will do a nightly trickle recharge at 220 volts, rather than use Phoenix’s fast recharge option.

Rick Sikes, Fleet Superintendent, showed me a wide range of clean vehicles. A total of 265 city vehicles run on natural gas, include heavy trucks and street sweepers. The city negotiated a favorable contract for CNG costing the equivalent of $2 per gallon. 21 city cars are hybrid.

Over 80% of the city’s 519 vehicles are either alternate fuel (alt-fuel) or electric. 100 of Santa Monica’s Big Bus fleet is liquid natural gas (LNG), which they state is 77% cleaner than diesel. LNG provides a 300 mile range. 88 buses run on B20 biodiesel. Only about 20 older buses run on standard diesel.

5 of the city’s fleet of Toyota Priuses were converted by Quantum to run on pure hydrogen. The city has a Proton electrolyzer that splits water (H2O) into hydrogen and oxygen. Because the city buys renewable energy for the electricity that runs the electrolyzer, resulting in the hydrogen Priuses producing no green house gases, on a “well to wheels” basis. Over the next few years the city fleet will get cleaner. Hydrogen can be mixed with CNG to make many of the existing vehicles run cleaner.

For jobs like parking enforcement and quick commutes inside the city, the zero-emission vehicles are perfect, as are the 70-mile range hydrogen Priuses.

Santa Monica commuters are encouraged to burn less oil than the national average. Only 69% drive solo vs. 76% as the national average. In Santa Monica, 19% carpool, 7% bus, 3% walk and 2% bike to work. The city is making progress. In 1993, the average vehicle ridership was only 1.1; by 2005, it had jumped to 1.4.

Rideshare programs are encouraged. Financial incentives work. The City of Santa Monica implements a mandatory “Parking Cash Out” Program, which is a State law requiring employers of fifty or more employees who lease their parking and subsidize any part of their employee parking to offer their employees the opportunity to give up their parking space and rideshare to work instead. In return for giving up their parking space, the employer pays the employee the cost of the parking space. The city provides this for its only employees, achieving an AVR of almost 1.8.

Santa Monica has the potential to be a model of clean transportation, energy efficiency and renewable energy for other cities around the world. Each year, Santa Monica shares its progress, demonstrates the latest vehicles, and showcases expert speakers. Include October 20 and 21, 2007, in your calendar for the Alt Car Expo.

Ed Begley, Jr., in the Klamath Siskiyou region of CaliforniaFor nearly forty years, actor and environmental activist Ed Begley, Jr., has both talked the talk and walked the walk in advocating for a healthier human relationship with the natural world. Ed is perhaps best known for his role as Dr. Victor Ehrlich on television’s long-running St. Elsewhere (a role for which he earned six Emmy nominations), but has appeared frequently in feature films, television shows and stage plays. His recent HGTV reality show, Living with Ed, has been a hit with viewers, and the network recently extended the show for thirteen more episodes.

Ed’s decades of environmental work and leadership have earned him numerous awards and accolades from a variety of organizations, including the California League of Conservation Voters, the Natural Resources Defense Council, The Coalition for Clean Air, Heal the Bay and the Santa Monica Baykeeper.

Despite success and fame, Ed still lives in a modest home in Studio City, CA, that sports solar panels and an organic vegetable garden. He often cooks with a solar oven, and makes toast in the morning with a toaster powered by a stationary bicycle. He’s been known to show up for big Hollywood events on a real bicycle.

I spoke with Ed by phone on March 15th. We talked while he was driving his wife’s Prius to the bottler of his cleaning products, Begley’s Best.

Green Options: Since you’re in the middle of a trip for Begley’s Best, why don’t we start there. Now, let me clarify: this isn’t a case of you simply licensing your name and image for a product, right?

Ed Begley, Jr.: No, no, I have no employees, and I do it all mysef. I’m driving to my bottler’s in San Bernadino to drop off some product, and pick some up. That’s one of the wonderful things about doing this on my own: shipping costs are so high now, that it costs about $80 for me to ship, say, four cartons of the product to a supermarket in Santa Barbara. And, of course, they don’t pay me for the shipping — I have to do that myself. If I drive it up myself, I spend about $7 in fuel at today’s gas prices. This way, I sell it at a competitive price, and the customer’s happy, the store’s happy, and I’m happy! And, you get some very personal time with people like the grocery buyer, the store manager, and that means a lot.

The very first order I got was from a store called Lassen’s Market. Lassen’s ordered one case of this product I sell. So, I put the product in my electric car, and drove it the 35 miles to their store. The guy who signed for it, a really nice guy, was a little shocked to see me, but he signed for it, and I left. When I got home from the trip, there was a message from my broker asking “What did you just do?” I told him “I dropped the product off. You said they ordered it, so I took it to them.” He said, “They just called, and were so amazed that you brought the product to them that they want to order four more cases!” I told him, “OK, whatever you say,” and so I drove back again.

That’s the way it’s been; that personal touch helps a lot. I ship every order myself that comes in over the internet. I don’t bottle it myself — the bottling company does that, and puts it in cases, but, after that, it’s all me. And that works very well.

GO: So this is truly a home-based business?

EB: Yes, it is!

GO: So, how involved were you in actually developing the product?

EB: I didn’t invent the product at all — it came from a fellow named John Watts, who I met at Real Food Daily, this vegetarian restaurant. He saw me at another table, and said “Oh, my God, I’ve been looking for you! Let me run to my car.” I thought maybe he had a picture or a DVD he wanted me to sign. He came back with a bottle. “What’s this?” I asked. He said, “It’s a non-toxic cleaning product. I want you to help me sell it.” “OK…,” I said. “It’s got to be non-toxic, though.” “Oh, it is,” he said, “totally non-toxic.” “Do you have any testing data to support that claim,” I asked. “Oh, yes,” he said. “Here’s the MSDS, and all that.” “Fine,” I said. The testing data was good, and I took it to a lab myself to have it tested, and it came out good there, too. It’s a great product: it cleans great, and it’s non-toxic!

GO: Sounds great! So, why should I buy your product instead of, say, a product from Seventh Generation, or one of the competing products that’s out there?

EB: Oh, I wouldn’t try to talk you out of buying anything from Seventh Generation! I’ve been buying Jeffrey Hollender’s stuff for years, and it’s a great company. They sell so many wonderful products, and they do it nationwide. I’m selling mostly in Southern California, so his products are much more available than mine. I will say about my product, though, is I have a spot remover that really cleans great, and they don’t have a product like that. But their glass cleaner is all-purpose, and works great. I wouldn’t try to divert any sales from Seventh Generation to Begley’s Best. What they give back to the community, their mission statement… everything about the company is superb!

GO: On a personal note, how well does that spot remover work for pet stains? I’ve got four cats and a dog, and have been looking for something.

EB: It works great for pet stains!

GO: Great! I’ll have to give that a try! Since you’re driving in your Prius, I’ll go ahead and move on to vehicles. I know you’ve been promoting the Phoenix Motorcars SUT, and have talked about that to a number of other publications. Do you think electric vehicles have finally reached the point where they can move into the mass market?

EB: I think so — yes I do. I think because of advances in the battery technologies, electric vehicles are at a place where more people can use them. They’re not for everybody; they’re not even for all of my trips! If I’ve got to go to Santa Barbara, I don’t drive my electric car; I drive my wife’s Prius like I’m doing now. Now, with the greater range on this new truck, I might be able to do that. But for short trips, and for driving around LA, I’m going to take the electric car. Both it and the Prius are great vehicles. We’re fortunate enough to be a two-car family, so we have the ability to trade cars — that works out pretty nice!

GO: What do you think about other EVs or hybrids either in production, or being released as concepts? I’m thinking particularly of the Tesla Roadster, which has received a lot of press, or the Chevy Volt, GMs new concept? Do you have any thoughts on those?

EB: I think those other cars hold a lot of promise. I haven’t had a chance to drive the Volt, of course, but I can’t wait to see it and test drive it.

There are so many tools in our toolbox to clean up our air and lessen our dependence on Middle Eastern oil. Electric cars are one thing, hybrid cars are one thing, and natural gas cars are another. Biodiesel is very exciting. You know, my friend Daryl Hannah has been driving a biodiesel car for a while. It’s very exciting to see what Daryl, Willie Nelson, and others are doing to promote that technology. It’s got great potential to power a lot of our trips in this country in a very clean manner. So, I’m very much in favor of biodiesel, too.

GO: Of course, the major automakers have taken some heat for not embracing some of these cleaner car technologies more quickly. Do you think the established auto makers are getting it that there’s a demand for these cars, and a need for them?

EB: I hope so. I really hope so. I like to buy American cars: that’s why I drove a GM EV1, and why I drove a Ford Contour natural gas car for years. I like to buy American — I think that’s the way to go. Unfortunately, they don’t offer anything like the RAV4 electric vehicle that I drive every day. They don’t offer anything like my wife’s Toyota Prius that I’m driving to San Bernadino and back. When we bought the Prius, they finally came out with the Ford Escape. I have friends that have one, and who’ve driven both cars, and say the Prius is the better vehicle. That’s a shame. I wish that weren’t the case.

GO: Let’s spend a few minutes talking about your newest television show, Living with Ed. Now, that’s been renewed for 13 more episodes, right?

EB: Yes, it has!

GO: Congratulations on that! What do you think has made Living with Ed a hit?

EB: I think, having tried environmental shows in the past… you know, I had a show on the Discovery Channel called Today’s Environment that was on at like 4 in the morning. It was a very nice show, but it didn’t get a wide viewership. Other people have tried them, [HGTV] has tried them, but they just haven’t taken off! Now, you can argue about that, you can be upset about that, but it’s a fact: no one’s really watched these shows. We did this show with the idea that we would make it entertaining as well, that we would show a hint of our reality, me and Rachelle, and the sometimes funny way we have of dealing with each other. And it clicked — people watched it.

Now, there are people who say “I don’t need to see jokes on your show. Why don’t you just stick to the way you put up solar panels and such?” I respond, “I’m glad you want to see that; sadly, there there’s not a lot people like you.” The show is entertainment, and we have lots of take-aways in every show, and lots of people are watching. It’s a first! But, you know, we’ll see if it sticks around for a while.

GO: Of course, Living with Ed is a “reality show”; how much “acting” or role-playing goes into what we see?

EB: You know, I keep it quite real. They regularly come to me and say “Ed, tomorrow we want to shoot this or that.” What? “I don’t want to hear it,” I tell them. “Don’t tell me what we’re going to do tomorrow. You don’t even have to tell me what we’re going to do later today. Just tell me what we’re going to do right now: you’re going to get the rain barrels that you ordered, and now we’re going show people how you’d install them.” So, I’m putting them up. And, according to my wife, this was not a set-up: she comes home while I’m putting up the rain barrels… unplanned. She goes, “What’s that?” (Believe me, you don’t have to prompt her with this kind of stuff!) “What are you doing there?” I tell her, “We’re going to collect rainwater, honey. Isnt’ that great?” She says, “Great? That isn’t great at all! That’s ugly!” So I tell her, “OK — calm down. I’ll get some paint. We’ll paint them. If you don’t like the color…” And she says, “No. It’s not just the color. It’s ugly. We’re not having a rain barrel. I come from Georgia, people think I’m a cracker, and I’m not going to put a barrel in my back yard! Get it out of here! Even if you paint it…” So, I say, “Let me ask you this, Rachelle? What’s uglier: the fish flopping around there in the dry river bed because we waste water here in LA, or all the people wearing dust masks up in Owens Valley because of all the water we stole from them, and now they’ve got a dry lakebed? What’s uglier? You tell me.” And we get into it, and it’s funny, and it’s engaging, and it’s real!

GO: And the show certainly is about you two, as much as it is about your own environmental activities. The folks at Ecorazzi awarded you and Rachelle their Big Hearts Celebrity Couple award.

EB: Yes, they did!

GO: So, I wanted to ask, is the concept of sustainability, or some other environmental concept, something that applies (in a metaphorical sense) to your relationship with your wife?

EB: You know, you also have to have sustainability in your relationship. We seem to have a very different point of view about a lot of things, and we do. We find common ground, and most importantly, we laugh a lot. We see the humor in our different points of view. Neither of us keeps our opinion to ourselves, but we try to engage each other with humor… and that counts for a lot. If you can laugh, I think that’s a big part of making any relationship successful. Don’t take things too seriously! Of course, some things you have to take seriously, and I’m not saying always laugh everything off. But, having said that, as much as you can, try to take as few things seriously as you can. I think that’s the best way.

GO: Let’s talk about the bigger picture here for just a minute. You’ve been involved in environmentalism for nearly 40 years, right?

EB: Yes. I started in 1970, so that’s 37 years.

GO: The movement’s certainly changed since then, as much as it is a movement. How would you compare environmentalism of the 1970s to what exists now?

EB: I think we’ve come a long ways since then. A lot of the stuff we talked about back then seemed very far out: “Ozone depletion? That’s the craziest thing I’ve ever heard of! Global climate change? Get away from me! That’s nutty!” But, a lot of the things that were talked about, and seemed quite unusual years ago, now have a great deal of scientific consensus. And, this is just as important: all of these things that we thought would help clean up the air in LA, and lessen our dependence on Middle Eastern oil, did work. There are ways. It did not break the state of California. It did not break the nation to put smog control devices on vehicles. Or, stationary source reduction: it did not break factories to clean up the emissions from the smoke stacks, and to be a model for the nation. That stuff worked! We predicted it would work, and it did. The air in LA is not dirtier since 1970; it’s cleaner. And there are four time the cars on the road, so it should be much, much dirtier. We have four times the cars since 1970, but only half of the ozone [pollution]. Give everybody a medal! This stuff can work with the right technology. Technology has gotten us into some of these problems, but I also think it can get us out.

GO: And on technology — a different kind. You’ve talked to many of us in the online community; you’re a guest judge for Treehugger and Seventh Generation’s Convenient Truths contest; you given interviews to Ecorazzi and other web sites. What role do you think the web, and other communications technologies, have played in making people more aware of environmental challenges, and perhaps more concerned?

EB: The internet is the single biggest benefit to environmental awareness that I can think of. By that, I mean people can hear me talk about global climate change in my opinion. They hear Rush Limbaugh and Sean Hannity talk about climate change in their opinion. “I wonder who’s right,” they ask. “Let me do a Google search on global climate change, and stay away from all the environmental websites. No Greenpeace, nothing! Let me also stay away from all of the conservative web sites: let me just stick to the sites I trust. Who do I trust? I think I trust NASA. I think I trust NOAA. I think I trust Columbia University.” It doesn’t matter… just pick someone you trust. National Geographic. NOAA. See what they say. And you’ll see that, according to their experts, according to peer-reviewed studies, it is real. You don’t even need to own a computer: you can go to a library and find out this information. So, the web cuts to the chase. If people wish, they can stick to websites that follow their own views. That’s their choice; I think it’s foolish. I think you need to stick with good science and peer-reviewed studies. You know people say “It’s in the mainstream media, in Time and Newsweek…” I say “I wasn’t talking about Time and Newsweek.” “They just publish this stuff to sell more magazines,” they say. I say “I didn’t tell you to go to Time and Newsweek, or the LA Times or the New York Times.” I think that’s all pretty reputable stuff, because they have reputations to maintain. But I’m not saying go to them. I’m saying go to NASA. I’m saying go to NOAA. I’m saying go to Science magazine, to Nature magazine, where the top people in the field publish their findings in a peer-reviewed manner. Go there. And when you do that, whether by extreme good fortune, or however you choose to characterize that, it proves a lot of the points I’ve been making.

GO: Yep, it’s hard to argue with the peer-reviewed science. What about celebrity environmentalism over that same period — how has that changed?

EB: Thank God all of these people have been so outspoken, and gotten the word out there! Because I don’t think there’s time to go door-to-door to say “We have a problem.” You use the media, you use the microphone, the megaphone, the soap box, and you make sure you do it responsibly. You get your information from the best, most credible people — again, peer-reviewed studies, Nobel Prize-winning scientists, the best people — and if you do that, I think you’re going to be fine. Fortunately, it’s what people are doing!

GO: Do you have any thoughts about accusations of hypocrisy made against celebrities: “Oh, you fly in a private plane; you drive an SUV.”

EB: Yes, I think everybody needs to consume less and use less energy — Al Gore’s gotten a lot of criticism for that lately. I think it’s wonderful and commendable that he, as a former Vice President, with all that goes with that, with the security detail on site, that he’s mitigating all of that with carbon offsets. But, yeah, I think he should use less, too; I think I should less. You know, Sean Hannity was quite clear about his opinion about Al Gore, that he should use less energy, and I agree: Al and Tipper should use less, I should less, Sean Hannity should use less. I think it’s in our nation’s interest to lessen our dependence on Middle Eastern oil, to clean up our air, to put money in our pockets. That’s what’s not being talked about enough: the incredible savings that are available!

I’m going to look at my odometer right now as I talk. I’ve got 130,747 miles on this car. I’ve done lube and oil changes regularly. At 50,000 miles, I paid maybe $600 for regular maintenance. At 75,000, I paid maybe $800. That’s been it! People talk about, “Oh, it’s a hybrid; it’s going to cost more.” You get it back in gas savings. You get it back in service. And it’s not just a mileage game: what’s coming out of the tailpipe is so much cleaner! It’s good in so many different ways, and people are forgetting that.

GO: Oh, you’re absolutely right! We don’t talk about the cost savings enough, and that’s what’s going to get the larger mass of people to listen to what we’re saying.

EB: I think so.

GO: I’ll go ahead and get to my last question or two here. You mentioned carbon offsets when you were discussing Al Gore. On one epidsode of Living with Ed, when you and Rachelle were planning your trip to the Sundance Film Festival, you got on the computer and bought some TerraPass offsets. Rachelle’s initial response to this was “You’re only trying to alleviate you guilt.”

EB: Yes, that’s what she said. Let me speak to that: it’s true what people say. They tell me “You’re not doing anything to eliminate pollution at the tail pipe.” That’s true! That’s very real. But if you admit to that, you’ve also got to say that there’s a very real amount of green power that these companies buy, and that’s going on to the grid. That’s eliminating a very real amount of coal being burned. So, the emissions coming out of the tailpipe: those are real, and you can’t get away from that. But it’s also real at the power plant that is using that much less fuel to make power. Both are real — I won’t argue with you! But, eventually, when enough people start buying a TerraPass, they’re going to shut down power plants. There not just going to have them on a little less; there going to say “You know what: we don’t need that power plant in Indiana any more.”

GO: So, when you talking to someone about greening their life, how highly do you tell them to prioritize buying offsets?

EB: I think it should be on everyone’s top ten list. I really do. The number one best thing we can do is to drive less, whatever that means. It can mean, weather and business permitting, riding a bicycle. If you have it available in the city where you live, maybe it’s public transportation. If you’re fortunate enough to live, as I do, in a sustainable neighborhood, maybe it means walking a lot, which I do. All of these things are very postive: they’re good for the environment, they’re good for your health, they’re good for your pocketbook. So, I encourage people to pick the low-hanging fruit first: do what’s cheap and easy first, and then move up the ladder, and do the next thing, and then the next, and then the next. You don’t sprint up Mount Everest. You put one foot in front of the other, you get to base camp, you get acclimated, and then you go higher when you’re ready.

Johnson Controls-Saft CEO Mary Ann Wright explains the critical success factors for automotive lithium-ion batteries

As I noted last week, General Motors new Chevy Volt concept vehicle has received quite a bit of fanfare around the green blogosphere; as we also saw from some of the comments that post received, the company’s claim that it must develop an automotive lithium-ion battery to move the Volt to production has met with its share of skepticism. The media event I attended last Monday was aimed, in part, at skeptics — the company wanted to make its case for choosing this particular path, including the reasons for developing new battery technology instead of taking advantage of current nickel metal hydride batteries common to most hybrid vehicles.

While our breakfast meeting with Larry Burns was small and relatively casual, GM had a thorough formal presentation planned for the larger group of reporters and writers that gathered later in the morning. Joining Beth Lowery, GM’s VP of Energy and Environment, were Denise Gray, Director of Hybrid Energy Storage Systems for GM, and Joe LoGrasso, the Engineering Group Manager in that same division. Also present were representatives of the companies GM has contracted with in developing li-ion batteries for its “E-Flex” concept: Mary Ann Wright, CEO of Johnson Controls-Saft, Ed Bednarcik, VP and General Manager of A123Systems, and Scott Lindholm, VP of Systems Engineering for Cobasys. The presentations by all of these executives came together around two common themes: 1) the li-ion automotive battery is necessary for the E-Flex concept; 2) the combination of talent and experience GM had brought together can make it happen.

LoGrasso and Wright tackled the main question on everyone’s mind: why lithium-ion when nickel metal hydride is a battery technology that, according to LoGrasso, is “nearing maturity in cost and performance.” According to LoGrasso, GM had decided upon the following needs for a battery for the Volt:

• Energy: 40+ miles all-electric in city driving
• Recharge: While driving and with plug-in
• Power: EV driving full vehicle performance
• Life: 10 years/150k miles life

The advantages of li-ion batteries include:

• Superior specific discharge power & energy
  • ~40% less mass than NiMH
  • ~20% less volume than NiMH
• Excellent cycle life
• Long term cost potential
• Relatively low self-discharge
• Easier to control (determine SOC & power available)

To put this in terms that apply to most people’s driving, a NiMH battery in the space alloted for a battery in the Volt would provide a 25-30 mile range in electric-only mode, and not provide the power most consumers want — according to engineers that addressed this for me later by email, “The 0-60 would be unacceptable. The owner would also have issues with being able to drive up hills.” An li-ion battery, on the other hand, could provide a 40-mile electric-only range with the power most car owners expect. Wright also noted that lithium-ion batteries provide more power with less space and weight, which translates into cost savings. Challenges still exist, of course, including cold temperature performance (mentioned here), as well as life span, robustness & abuse tolerance, the more sophisticated electronics needed to maintain li-ion cells, and the initial costs of the batteries and battery packs before production can be ramped up to a scale that will bring prices down.

The questions asked here at Green Options also came up during the Q&A period — why not go with the technology currently available and upgrade as necessary? The company stuck to its story — li-ion is necessary to create a plug-in hybrid that meets the power and energy expectations of most consumers.

So, is it? GM and its partners made a complex case for this technology — we’d love to hear why you think they’re right or wrong.

For other takes on this presentation, visit Autoblog Green, Evolution Shift, and EcoWorld.

John Addison publishes the Clean Fleet Report (www.cleanfleetreport.com) and is the author of the 2008 book Save Gas, Save the Planet.

With panoramic views of the ocean, over 86,000 make Santa Monica their home. On the edge of Los Angeles, Santa Monica is a desirable place to work and live. Residents want to keep it that way and make the city a model of sustainable living.

Santa Monica plans to be the nation’s first “Net Zero” city. Through energy efficiency, solar and other renewable energy, the city envisions generating clean energy that matches its total energy consumption.

Santa Monica currently has over 60 buildings with solar power. Other residential and commercial buildings are in the process of installing solar roofing.

The Civic Center Parking Structure will have 250 kW of PV. Where the city government does not use solar power, the city has contracted with Electric America to supply the City with 100% renewable electricity. Electric America has the flexibility to use a mix of renewable sources including geothermal, wind, biomass power plants, and solar.

Solar Santa Monica launched a two year program on January 1, 2007. The voluntary program will start with 50 residential and commercial buildings. With the benefit of what is learned from these 50 projects, the program will be made available to all. The 50 buildings will include 30 to 35 residences, 5 to10 business and 5 municipal buildings.

Susan Munves estimated that over 20 years, $1.4 billion is the probable investment required to achieve being a “Net Zero” city. This is likely to be less than the current utility electric costs. The city will only invest a small part of that investment. The city’s primary role is facilitating and project management. Santa Monica’s 20 year plan would eliminate electricity produced by coal and natural gas power plants, and all the resulting greenhouse gas emissions.

Stuart Cooley, Energy Efficiency Engineer for the city, explained that a detailed GIS database was developed of all the roofs of the city. Aerial photography was used to identify over 100MW of available rooftops on the 17,500 roofs in the city. With future solar PV technology, the roofs could represent even more solar energy potential.

Solar Santa Monica makes it easy for citizens to participate. To prevent excess expensive solar power from being installed, the city offers energy audits and identifies solutions from efficient fluorescent lighting to energy saving appliances to cut usage. The city is prequalifing “preferred partners” to install efficiency upgrades. Prepackaged PV and solar thermal systems are offered to residents and include preferred pricing, streamlined purchasing, permitting, installation and financing.

For commercial properties, Solar Santa Monica will provide comprehensive energy assessments for both the property owners and the leasing businesses. Proposals will be delivered with energy bill analysis, system specifications and pay-back analysis. Tax advantages will be detailed. Preferred financing sources will be offered.

Today’s guest post comes from our friends at Solar Kismet. You can find Part 1 of this series here.

The three most common reactions from many CitizenRE supporters when questioned about unrealistic goals is to:

1. Dismiss any questioning as being a solar industry conspiracy against the new competition. However, three other solar companies already offer a similar rental model, and you would be hard pressed to find any serious debate on their integrity.
2. Chastise the existing industry as having accomplished little and not having a real vision for the revolutionary ideas, even though the industry has grown at a rate of 40% annually over the last decade. Thousands of people work in the solar industry, many of whom have no vested financial interest in any one company, and a sizable portion are skeptical of CitizenRE’s claims.
3. Explain what CitizenRE isn’t rather than answering the substantive questions about what it is and can reasonably accomplish.

Ultimately, the skepticism of CitizenRE is founded in overstated plans that have relatively little supporting documentation, other than “trust us.” CitizenRE’s goals are ambitious to say the least:

• World’s Largest Solar Manufacturing Plant - Last June, Nanosolar (a company started in 2001 and backed by the Google founders) announced the construction of a 430 megawatt solar manufacturing facility, the world’s largest. Nanosolar’s new thin film technology was met with cautious optimism: as one industry insider put it, announcing and producing are two different things. CitizenRE states it intends to develop an even larger 500 megawatt solar manufacturing plant that will use a new combination of lower-quality silicon material. Originally slated to begin production in early 2007, the CitizenRE website now states a production goal of early 2008. In a recent interview, Sharp Solar, one of the world’s largest solar companies, indicated they have manufacturing lead times of 18-24 months under the best circumstances, which would further push CitizenRE’s new plant into 2009. The proposed plant is not on the radar of any solar news or industry analysts and CitizenRE has still not announced a location.
• New Solar Technology - CitizenRE’s new solar manufacturing plant will use a lower-purity silicon in the production of the solar panels, in hopes of lowering costs. All things being equal, this will result in a lower-efficiency solar panel. The new technology has no commercial track record. Furthermore, silicon supplies are tight, impacting multinational corporations like Sharp and Kyocera. CitizenRE will also need to deal with this tighter market.
• New Inverter Manufacturing Plant - Solar panels produce DC power, like batteries. Inverters convert the DC power into grid-compatible AC power. CitizenRE also intends to build their own inverter manufacturing plant.
• Third-Party Solar System Ownership - Three companies already offer “third-party ownership,” where a solar company owns and operates the solar system installed on a customer’s building. CitizenRE is similarly proposing to operate the third-party ownership model on residential homes, a scale over 200 times smaller. The also plan to do business in 30 or more states than existing companies currently operate. Industry analysts indicate that they cannot run any realistic scenarios where such a venture could be profitable.
• 100,000 Installations per Year - There are currently about 35,000 solar systems in the United States, with approximately 30,000 (PDF) of these coming in the last six years. CitizenRE originally had a stated goal of 100,000 installations per year, which has since been scaled back to a reported 25,000 per year.
• 2025 Vision - By 2025, CitizenRE has a vision to operate 25% of net electricity generation (presumably in the U.S.), 20% of peak capacity (also presumably in the U.S.), 330,000 megawatts of solar manufacturing capacity, and over 1 million megawatts of installed capacity. It is truly unclear how these are in the realm of reality. They will need to build 660 of their 500 megawatts plants in the next 18 years - that’s thirty-eight plants per year. And the first one has been delayed at least one year.

If any ONE of these things was announced by an unknown company, the idea would be met with serious skepticism. Frankly, if many of these things were announced by an established company, there would be skepticism. But the combination of industry-changing goals, all with serious learning curves, really brings into question CitizenRE’s basis of understanding. Could five established companies accomplish these goals, let alone one unknown?

CitizenRE’s business structure and start-up methodology also raise questions. As a multi-level marketing company, CitizenRE has recruited over 5,000 “ecopreneurs” who are not company employees, but rather associated with the company and will potentially receive a payment based on signing up other customers. Typically MLMs involve emotional sales pitches, sold from person to person, and can be associated with devolving into pyramid schemes, where a few top leaders make money by exploiting the lower ranks.

In CitizenRE’s case, money isn’t exchanging hands, which is frequently cited as a reason CitizenRE can’t be a scam. Instead, an equally powerful motivator is being used, one that drives the environmental movement: hope. CitizenRE is essentially promising THE energy, environmental and economic solution all rolled into one. It’s a powerful emotional driver that has resulted in the viral spread of CitizenRE’s ecopreneurs and potential customers, many of whom are no doubt one in the same, and whom may not understand the nuances of what they are selling or purchasing. Perhaps the promise of a future solar system is reason enough to participate, in leiu of immediate payment. Since ecopreneurs will ultimately be compensated (PDF) based on the number of systems they refer, misinformation and excessive hype has been the common marketing strategy. The company has since disapproved of such tactics, and ordered associates to stop using such tactics.

In addition to the sales force and resulting customers, CitizenRE will also need to train and recruit hundreds, if not thousands, of site inspectors and installers across the country. Not all homes will be suitable and every installation is unique, with the permitting and interconnecting process varying by each locality and electric company. Imagine trying to process 25,000 permits for a backyard deck, a common permitting request, in a few thousand cities. Now imagine doing so with a technology of which the inspectors are only vaguely aware. As permits delay things, installation quality will likely suffer in the name of making up speed and efficacy. And once the installation is complete, the system needs to be inspected for safety with the electric grid. Delays are inevitable at nearly every level of the sales and installation chain.

Ultimately, one wonders why they did it this way - marketing heavy and delivering lightly. Why not start building the manufacturing plant, which in order to raise money from investors or loans from banks, would have to show fiscal solvency in and of itself? Prove that idea. Why not start installing tens, and then hundreds of systems in the California first, the best market for solar systems, and build some industry experience and credibility? Prove that idea. Why not focus on doing one thing well before doing all things hypothetically? I am amazed at how far the hypothetical has taken this company.

Instead, CitizenRE has promised it all to everyone. There is basically nothing they haven’t decided they can do bigger and better than the existing solar industry, as if forging new paths is only a matter of an idea. But ideas are cheap and CitizenRE needs to hit grand slam after grand slam in order to come close to their vision. The shifting time frames and requests for patience have already started, and it is only a matter of time before various parts of the plan fall apart. The best businesses do one of two things - “promise and deliver” or “underpromise and overdeliver.” It’s kind of ironic that the industry is now abuzz about CitizenRE, a brand new company that hasn’t delivered anything…only promised.

Next Time: What effect might CitizenRE’s improbable success have on the industry? What about failure? (part 3 of 3)

Editor’s note: Today, we’re happy to bring you the first of what we hope will be many guest posts on the Green Options blog. Today’s guest post comes from our friends at Solar Kismet.

Most of us in the Green Blogosphere have followed new company Citizenrē, and its REnU program, with great interest. Mike has been analyzing the company at Solar Kismet, and we asked him to share his thoughts with our readers.

As Green Options launches new features and tools in the coming weeks, you’ll see that we’ll be involved in helping consumers consider their options for solar power. As such, we firmly believe that full transparency is necessary for the solar industry’s continued growth. This author’s thoughts and ideas are his own, and do not necessarily reflect those of Green Options, its management or staff.

Green products come in all shapes and sizes, with many varying claims about their content, performance and cost. Sometimes it’s hard to understand the nuances of something you don’t want to become an expert in - you just want it to be excited about your green choice and have it work. Renewable energy is no exception.

Renewable energy captures everyone’s imagination, much more so than its practical cousin, energy efficiency (those funny-looking lightbulbs really do work). But it’s hard to evaluate what the best renewable energy options are environmentally and economically. You can buy green electricity (but is that really helping anything?), you can install a solar system on your house (but it’s so expensive!), you can get more energy efficiency (so boring!), or you can have a solar system installed on your house for no money down and fix your electricity rates for the next 25 years (really?).

Did you catch that? “No money down” and “solar energy” aren’t two words that normally come together. But they have in the last two months and it’s caught the eye of thousands of people interested in selling and buying these systems. But what’s the catch? Exactly. Here’s a short lesson in “too good to be true”…

I should preface this by saying that I’m a skeptical person. I’m not going to be the one leading the masses with inspiration, so when I first heard of Citizenrē, a new solar energy company and their “no-money down” solar business model, small flags went up. I didn’t think too much of it at first. But when I started to get questions from multiple, non-related sources (consumers, industry, consultants, etc), I realized that Citizenrē had started to gain real marketing traction and decided to look into it a little more…

Citizenrē purportedly offered consumers the best of all solar energy worlds - a solar electric system on your home for no money down, no risk, and insurance against future electricity cost increases. Their goal was to install 100,000 solar systems per year on homes across America and they were recruiting salespeople from all over the internet, as well as pushing press releases, websites, and blogs touting their goals and promises everywhere. (Editor’s note: According to Renewable Energy Access, Citizenrē now plans to install 25,000 systems annually).

Here’s how Citizenrē’s model would theoretically work:

Interested consumers sign a contract with Citizenrē to have a solar system installed in exchange for a monthly solar system rental fee; reportedly, if you signed a 25 year contract, no deposit was required. Homeowners and businesses in more than 35 states would be eligible (those with net metering and a retail electric rate of 7 cents per kilowatt-hour or more). The monthly rental fee would be equal to the amount of electricity the solar system would produce annually multiplied by your cost of electricity (or even less). So instead of paying your electric company $100, you might pay them $50 and Citizenrē $50, if it offset 50% of your electricity use that month. Note that you haven’t saved any money at this point. Theoretically, you could pay Citizenrē a little less, say $45, if your Citizenrē rate was lower than your electricity rate. But the main benefit is that you lock in your electricity prices for the length of the contract and assuming electricity rates go up over time, you started to pocket the difference as personal profit.

A quick example:

• A 3 kilowatt solar electric system installed in Colorado might produce 4000 kilowatt-hours per year;
• If a home uses 8000 kilowatt-hours per year, it will offset 50% of your use;
• If your electricity rate was 9 cents per kilowatt-hour (cents/kWh) and you signed a contract with Citizenrē for the same amount, you pay each $360 per year (save nothing);
• If your electricity rate went up to 10 cents/kWh the next year, you would pay the utility company $400 and Citizenrē $360 (save $40);
• You can move your solar system once at no charge, or reassign the contract to the new homeowner.

What’s in it for Citizenrē? They take your monthly rental fee, the federal solar tax credits, accelerated business depreciation benefits, potentially lower costs from vertical business integration, and potentially the renewable energy credits (if legal).

I should stress that this business model in and of itself is not new. At least three companies (SunEdison, MMA Renewable Ventures, and Solar Power Partners) offer the same concept to companies or utilities installing large solar systems in limited markets where the incentives and policies align. And I suspect the concept will trickle out to more states and smaller solar systems over time. But not now and not Citizenrē.

Unfortunately, Citizenrē has put their marketing cart before their solar panel horse. They have built up a salesforce of thousands and pre-sold thousands of solar systems, but they have nothing to install for at least a year. Not one solar panel.

Next Time: If the business model isn’t new, why does Citizenrē raise so many flags? (part 2 of 3)